Knitting the future together: The Benetton boss is looking towards non-European markets as part of a turnaround plan

He is flanked by another aide wearing a bright green Benetton jumper.

An entourage of at least a dozen
eager-looking aides mill around excitedly in the corridor outside. They
are all here to talk about Benetton’s most recent social awareness
campaign, which aims to find the ‘unemployee of the year’.

Unfortunately for them, I am here to talk about jumpers.

Benetton admits the family firm has
lost ground since its 1980s heyday, when struggling to compete against
its ‘pile ’em high, sell ’em cheap’ rivals.

The chairman says: ‘The world has
changed in the past ten years. What happened is our brand has let itself
fall into the category of fast fashion retailers.

‘This is something we are not. We
come from a highly technological, industrial system for knitwear and
colourful, Italian-taste types of products.

‘Maybe with the speed of fast fashion
we kind of lost touch with our final consumer and therefore we didn’t
make sure that what I just said was perceived by our final customer.’

In a swipe at his rivals he says: ‘We
are confident that the quality of our product is better than many other
products that people would perceive as our competition.’

Warming to his theme he adds: ‘A more
important element is that difference from all the brands you have in
mind – we just use natural raw materials, we don’t use any synthetic
fibres. We have never done that.’

The sports-loving, self-appointed
philosopher admits that the company has not done a particularly good job
of letting people know what it is about.

Some would say this is rather self-inflicted.

For many in the UK, Benetton is
perhaps better known for its controversial advertising campaigns and its
Formula 1 racing team than for its clothes.

More recently it gained notoriety –
and a run-in with the Vatican – for running an advert featuring Pope
Benedict XVI kissing a senior Egyptian imam on the lips.

The advert – part of a campaign with images of world leaders kissing – had to be pulled.

Those with longer memories will
remember the shocking 1993 image of an Aids-afflicted newborn baby with
its umbilical cord still attached.

Persisting with shock tactics does not appear to have helped Benetton sell more clothes.

It has over 6,500 stores in 120
countries and sells 150million garments every year. But sales have been flat
for the past decade, dropping from €2.1billion in 2001 to just over
€2billion last year. Profits have slumped from €163mllion in 2001 to
€73million in the same period.

After issuing a profits warning, the Benetton family – which owned a 67 per cent stake – took the company private again this year.

There is no doubt that Alessandro
Benetton has a tough task on his hands to revive the firm’s fortunes.
For one, he has to contend with the moribund economy of his native
Italy, as well as the rising cost of raw materials.

Before he became a director at the family firm in 2007, Benetton was determined to prove he could make it on his own.

He did a stint at Goldman Sachs in
London, but says his biggest achievement was setting up a private equity
house called 21 Investimenti at the tender age of 26. This now manages
over €1.3billion. His ventures proved to Benetton and his family that he
was capable of taking over the empire. He became chairman in April.

He says: ‘I’m an entrepreneur. I
didn’t want to be involved in the family business.’ Even after earning
his spurs he says it was a difficult decision to join the firm, which
was founded almost half a century ago by his father Luciano.

‘For me, the hard decision was to
accept it, because I had a different life that made me very satisfied
and happy, and gave me a different identity.’

Certainly, the swarthy Italian
appears to have led a glamorous life – he spent much of his twenties as
the boss of Benetton’s championship winning Formula 1 Team. Women, fast
cars, champagne – surely every man’s fantasy? Not, apparently, for
Benetton, who insists that his eye was always on the business.

He reveals that part of his turnaround strategy for Benetton will be to focus on new markets further afield.

‘We have to focus on other markets apart from Italy and Spain. I see optimism for Russia, India, Turkey and Mexico.’

The firm is also launching a new
collection next year – focusing on colourful knitwear and
thought-provoking adverts exploring social issues such as unemployment
and tolerance.